A robust strategy (#422)

Simon Shares

• Distell Group (JSE code: DHG) issued a solid update albeit short on numbers with one exception. They reduced net debt by some R1.7billion which is a massive number.
• Pick n Pay (JSE code: PIK) is heading into Nigeria and the market is worried as Nigeria is littered with the bodies of corporate South Africa. But they are doing so in smaller regional malls and not going big, so if it fails it won't be costly.
• The Standard Bank (JSE code: SBK) update fits in with news out of a press conference of last week. 90%-95% of loans that took payment holidays are back and paying. A sold number, but it does show lenders are not yet out of the woods.
• Absa changing their distribution policy for the NFGOVI (tracking the top 10 bonds issued by the South African Government). Instead of reinvesting they will now payout distributions.
• Very strong update from Cashbuild (JSE code: CSB) with Q1 revenue up 22% and stock is up some 9% in the news.

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A robust strategy

The US election is some twelve days away and while the pundits have Biden as the clear favourite to become president and the democrats maybe even taking control of the senate. How much should one start adjusting ones portfolio?

Lot's of talking heads are spinning one story or the other as to how to position accordingly, of course, that's if the results go as they expect.

And sure, a Biden win will likely see changes to taxes in the US, a large stimulus come February and maybe a more social friendly budget (such as the Affordable Care Act from Obama).

But these talking heads are firstly short-term traders and really as a trader one should be responding to price action, not trying to predict legislation and the impact?

For a long-term investor chopping and changing every time there is a new president in the White House (or any other house) surely means you're strategy is not robust enough?

What I mean here is that politicians, political parties, polices and the like come and go. Sometimes quickly sometimes slowly. But our long-term portfolio needs to be able to manage all of these changes without having to consistently adjust things.

I always invest with one core long-term theme in mind that guides my investing. A globally growing middle class as people move into the cities and their quality of life and wealth improves.

From here yes tax rates and the like will have an impact. Bu not so significant that I'll have to switch stocks never mind strategy.

As a long-term investor make sure you have a simple and hence robust strategy that is largely immune to the noise emanating from politicians.

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